Tether surpasses Germany’s $111B of US Treasury holdings

Tether, issuer of the world’s largest stablecoin USDT, has significantly expanded its US Treasury bill holdings, surpassing Germany in the process. As of Q1 2025, Tether’s Treasury bill holdings exceed $120 billion, making it the 19th largest holder globally, a position exceeding even Germany’s $111.4 billion. This substantial investment underscores Tether’s conservative reserve management strategy and highlights its growing influence in distributing dollar-denominated liquidity.

Tether’s strategic investment in US Treasuries, considered among the safest and most liquid assets globally, serves as a crucial component of its reserve backing for USDT. This diversified approach proved highly effective in mitigating the impact of cryptocurrency market volatility during Q1 2025. The firm reported over $1 billion in operating profit from traditional investments during this period, largely attributed to the strong performance of its US Treasury portfolio. Gold holdings also helped offset crypto market losses.

Tether’s success in navigating market volatility is further evidenced by its position as the seventh-largest buyer of US Treasuries in 2024, surpassing several countries, including Canada, Taiwan, Mexico, Norway, and Hong Kong. This demonstrates the firm’s proactive approach to risk management and its commitment to maintaining the stability of its stablecoin.

The ongoing debate surrounding US stablecoin regulation is likely to influence future investments in Tether’s USDT. The STABLE Act, which passed the House Financial Services Committee, awaits a floor vote, while the GENIUS Act, aimed at establishing collateralization guidelines and AML compliance for stablecoin issuers, stalled due to concerns around potential conflicts of interest related to President Trump’s family’s digital asset ventures. Despite this setback, significant industry support for the GENIUS Act continues, as evidenced by a recent gathering of over 60 leading crypto founders in Washington D.C. advocating for its passage. Increased regulatory clarity is expected to further solidify Tether’s position and potentially encourage further investment in its reserves.